Tuesday, February 19, 2013

FDA Talking Points Series: Public Subsidies for Political Candidates/Parties

Gary Johnson was one of three 2012 U.S. presidential candidates to receive public subsidies in the form of matching funds. The other two candidates were Jill Stein and Buddy Roemer. Obama and Romney opted for the privately funded route to avoid caps on their campaign expenditures. With the Citizens United ruling, there is the possibility that the U.S. presidential matching fund will be eliminated to prevent government bias when it comes to public election funds.
The Foundation for Democratic Advancement (FDA) supports public subsidies for political parties and candidates as long as the subsidies are equally available in amount to all registered parties and/or candidates. The FDA does not support public subsidies to parties and/or candidates which favor some parties and/or candidates over others. In addition, the FDA acknowledges that a balance needs to be obtained between very high public subsidies and thereby the potential for party dependency on them versus very low public subsidies and thereby the potential for highly underfunded parties.

The common arguments used to justify biased public subsidies are:

1. the parties and candidates more successful in the previous election should get more subsidies over parties and candidates less successful in the previous election;

2. the parties and candidates with the most public contributions should get the most public funds, and thereby linking level of contributions with public support;

3. the parties and candidates with most popular support should receive public subsidies or receive the most, and thereby justifying levels of public support needed in order to receive public funds;

4. the new and small registered parties are fringe and radical parties, and therefore, they should not be given public funds.

The FDA believes that all registered parties and/or candidates should have equal amounts and access to public funds in order to maximize election competition, or none at all. The FDA assumes that the highest level of election competition will produce the best election results for democratic society. Therefore, the FDA supports an equal playing field within reasonable limits for all registered parties and candidates. To support an unequal distribution of public subsidies favors some parties and candidates over others, and thereby weakens the democratic process. To say that these parties were more successful in the previous election favors unfairly a party based on past performance. To say that some parties are fringe or radical and therefore should not receive public subsidies is biased. It is up to the electors and not anyone else to determine which parties and candidates are worthy of their support. To say that some parties and candidates have more popular support is to argue based on past results, rather than an election yet to occur.

Examples of Public Subsidies: 

1. United States:

Presidential candidates which adhere to caps on campaign expenditures are entitled to a public matching of contributions raised. The more contributions raised, the more public funds the presidential candidate can attain up to the maximum expenditure limit. There is no basis of equality in the public subsidy except that  public subsidy matching process is available to all registered presidential candidates subject to subsidy qualifications.

Research: 

Public subsidies of parties are based on the percentage of total votes received in previous election (Federal Election Commission, Public Funding of Presidential Election Brochure, 2012).

Publicly funded Presidential candidates are subject to campaign expenditure limits. Privately funded Presidential candidates are not subject to expenditure limits (Federal Election Commission, Public Funding of Presidential Election Brochure, 2012).

U.S. taxpayers have the option to decide whether or not to direct $3 of their tax to the Presidential Election Campaign Fund on their tax returns (Federal Election Commission, Presidential Election Fund, 2012).

Funds in the Presidential Election Campaign Fund are divided up in three ways:

(1) Primary matching payments are based on the government matching individual contributions to a candidate, and only the first $250 of a contribution is matchable. To be eligible for matching, a candidate needs to raise more than $5,000 in each of 20 different states.

(2) General election grants are for Republican and Democratic candidates who win their parties' nomination. The candidates are eligible to receive $20 million, adjusted for cost-living-adjustment to cover campaign expenses. In 2008, candidates could receive $84.1 million. Third party candidates are eligible to receive a percentage of this grant if the candidates receive at least 5 percent of the popular vote. (The 2008 expenditure limit in 2008 was $88.45 million.)

(3) Party convention grants are for major political parties for their national Presidential nominating convention. The parties are eligible to receive $4 million, adjusted for inflation. In 2008, the major parties received $16.82 million. Third parties are eligible for the grant if they received at least 5 percent of vote in the previous Presidential election. The Federal Election Commission defines a majority party as 25% or more of the total popular votes in the previous election; minority party as between 5% or more and less than 25% of the total popular vote in the previous election; new party as a party which did not participate in the previous election (Federal Election Commission, Presidential Election Fund, 2012).

The 2012 general campaign limit for publicly funded candidates is $91.2 million. The 2012 primary limit for publicly funded candidates is $45.6 million (Federal Election Commission, Presidential Spending Limits for 2012).

Publicly funded candidates have a campaign national expenditure limit of $20,000,000 (subject to cost of living adjustment) and a primary expenditure limit of $10,000,000 and in anyone State shall not exceed either 16 cents times the number of voters in the State or $200,000, whichever is greater (Federal Election Commission, Presidential Election Fund, 2012).

Limitations:

The U.S. presidential candidate public subsidy favors the better fund raiser, and it does not produce electoral finance equality among publicly funded presidential candidates or publicly and privately funded presidential candidates. In addition, the public subsidy is based on popular support in the previous election, and thereby does not reflect popular support in the current election. In addition, the public subsidy influences the opinion of the electorate by favoring some presidential candidates over others.

2. Canada:

From the soon to be published 2013 FDA Global Electoral Fairness Report on Canada, registered political parties are entitled to public subsidies if they receive 2 percent of the popular vote in the current election or 5 percent of the valid votes cast in the electoral district of the candidates they endorsed. In 2015, this public subsidy will be phased out. However, also, registered parties receive a 50 percent reimbursement on their campaign expenditures if they receive 2 percent of the popular vote in the current election or 5 percent of the valid votes cast in the electoral district of the candidates they endorsed.

Research: 

The Chief Electoral Officer determines for each quarter an allowance payable to a registered party whose candidates received either 2% of the popular vote or 5% of the valid votes cast in the electoral district the candidate ran in for the most recent general election (Canada Elections Act, 435.01(1)(a)-(b)).

The quarterly allowance is the multiplication of the valid votes cast in the most recent general election by $0.3825 for 2012; $0.255 for 2013; and $0.1275 for 2014. All quarters begin on April 1st (Canada Elections Act, 435.01(2)(a)-(c)).

The Conservative government revised the federal budget to phase out the public subsidies for federal political parties beginning April 1st 2012 (Smith, J., July 4, 2012).

The annual subsidy was lowered from $2.04 in 2011 to $1.53 per vote in 2012 and will be further reduced each year on April 1st until it is eliminated in 2015 (Smith, J., July 4 2012).

If a registered party receives 2 percent of the votes cast in the election or 5 percent of the number votes cast in the electoral district in which the part endorsed a candidate, then 50 percent of the parties’ electoral expenses are refunded (Elections Canada, Article 435 (1)).

Limitations:

The 2 percent and 5 percent thresholds favor large, established registered political parties over new and small registered political parties. Also, the thresholds support electoral finance inequality between large, established parties because parties with larger expenditures will get larger refunds.

In summary, the FDA takes the position that public subsidies should be equal in amount to all registered parties on grounds of legislative neutrality and electoral competition. The FDA assumes that legislative neutrality and electoral competition are central to attaining the best electoral outcomes for democratic society.

Question:

Do you agree or disagree with the FDA position? Tell me why in the comment section, and I will respond with what I know. The purpose of this dialogue is to share ideas and expand one's understanding of important democratic issues. 






 Mr. Stephen Garvey, Foundation for Democratic Advancement, Executive Director







 

2 comments:

Thank you for sharing your perspective.